Dunbar's Number, Cross 150 With Caution

Do organisational structures need to transform once they exceed 150 members in number?

In the fast growing companies of the dot com boom, and now in boom 2.0, many companies must experience the aggressive growth that takes them past the 150 team member mark without them realising what's happening to them.

Why 150? What is it with 150 that makes it significant?

The idea was first floated by British anthropologist Robin Dunbar (b. 1947), but subsequently popularised by Malcolm Gladwell in his book "The Tipping Point".

Known as "Dunbar's number", the number 150 is a theoretical maximum number of individuals with whom a group can maintain a social relationship where each knows who each other is and how they all connect socially.

So - in a group of 150, it is still possible to know everyone else, understand their roles and their relationships with each other. Beyond that, forget it.

This number is pretty significant therefore when it comes to shaping organisational structures. With a team of 150 you can still manage with a relatively flat reporting structure, fairly informal communication processes and decision making.

Once you cross from the "medium" company threshold into "large", the old ways just don't work any more. You need a different way of managing communication, direction, decision making. What's more the people that worked well in that environment most probably aren't the same type of people that work well in the smaller team. "Things aren't the same around here any more", "It's not what it used to be"... suddenly you've got 30% attrition and a super stressed out recruitment team.

Gore Associates (makers of Gore-Tex among other things) apparently keep their manufacturing plants under 150 persons. They found this size keeps people in touch with each other. If they need more production capacity, rather than expand a plant that's at the 150 limit, they'll start a new one.

Army regiments work in a similar manner. And just for good measure, Dunbar's surveys of settlements in ancient times show a tendency to be limited at about the 150 number.

Good companies require effective teams to succeed. Most companies however grow organically and rarely do leaders stop and ask how the social relationships in their teams work and what the effect of growth on those relationships might be.

So, a word of caution: if you are a small company doing well, and aim to hire employee number 150 in the coming months, start thinking about what your world needs to look like as you become a medium sized company.



See also: Wikipedia, Dunbar's number